The 30-Second Debate: DiMA Argues Fair Use

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The debate over whether online music stores should pay royalties on 30-second clips has been going on for years. While music providers are pushing for royalty-free use, the Digital Media Association (DiMA) and the National Association of Recording Merchandisers (NARM) have asked a federal court to reject arguments for compensation on 30-second preview streams.

The argument stems from a case between ASCAP and AT&T Wireless, which is pushing back against royalty demands on thirty-second ringtone and ringback tone previews. The amicus brief extends the argument into online channels. DiMA members pay tens of millions of dollars in royalties to songwriters and publishers for online music sales. If ASCAP succeeds in pressing its demand for a new payment for these previews, internet music retailers would be disadvantaged simply because they are selling online, and songwriters and music publishers would be getting a royalty for the preview on top of the appropriate and well-deserved royalty that is paid when the music itself is sold.

Music providers argue that 30-second clips are not substantial enough to warrant royalty payments, and that they are beneficial to the songwriters and publishers as they serve as a promotional tool. They claim that the clips help consumers make informed decisions about purchasing the full track, and that they ultimately lead to increased sales.

However, some argue that a 30-second clip can be enough to provide value to the listener and therefore should be compensated. After all, a songwriter and publisher put time and effort into creating a song, and a listener may find value in just a small portion of it. Additionally, some believe that if online music stores are making money from the preview clips, it’s only fair that songwriters and publishers receive a portion of that revenue.

It’s important to note that ASCAP is not asking for a new fee on previews, but rather for the courts to clarify that previews are included in the existing licenses for online music providers. ASCAP argues that if previews were not included in the licenses, it would create a loophole that would allow providers to avoid paying royalties on previews altogether.

The argument over royalties for 30-second clips is just one example of the ongoing debate over how songwriters and publishers should be compensated in the digital age. With the rise of streaming services and the decline of physical music sales, the traditional model of paying royalties based on album or track sales is becoming less and less relevant. Many argue that a new system of compensation should be put in place that accurately reflects the value that songwriters and publishers bring to the industry.

In the meantime, it’s up to the courts to decide whether online music stores should pay royalties on 30-second clips. The outcome of the ASCAP vs. AT&T Wireless case could have significant implications for the industry as a whole. If the courts rule in favor of ASCAP, it could mean that online music providers will have to pay royalties on previews, which could lead to increased costs for consumers. On the other hand, if the courts rule in favor of AT&T Wireless, it could mean that previews will remain royalty-free, which could be seen as a win for music providers but a loss for songwriters and publishers.

Regardless of the outcome, it’s clear that the debate over royalties in the digital age is far from over. As the music industry continues to evolve, it’s important that all stakeholders work together to find a solution that is fair to everyone involved.